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LLP vs. Ltd Co: Restructuring your firm in light of the UK LLP tax changes

In the first of a series of five team articles on how to restructure your ?law firm in light of the UK LLP tax changes, Jonathan Cheney provides ?an overview of the areas to consider when choosing between an LLP ?and limited company vehicle

20 March 2014

Much has already been written about the review by HM Revenue & Customs of the taxation of UK limited liability partnerships (LLPs). Some commentators welcome the forthcoming changes introduced by the Finance Bill 2014 as an overdue response to immoral tax avoidance. Others view the new rules as a cynical revenue-raising exercise. But, irrespective of your viewpoint, change is coming. And it is coming faster than most partnerships would like.

Understandably, many firms carrying on all or part of their business through a partnership or an LLP have already begun reviewing their legal structures. Changes to the tax rules could have a significant impact on distributable profits, so it is not possible to divorce tax from any discussion regarding the optimum structure through which to operate a business. However, in most cases, tax should not be the only (or even primary) consideration. So, what other factors shoul...

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